Facebook fined $122M in Europe over misleading WhatsApp filing

Facebook’s 2014 acquisition of messaging app WhatsApp cost $19 billion when it was announced. Now the price tag has been bumped up a little more, after European regulators slapped the company with a €110M (~$122M) fine for providing “incorrect or misleading” information at the time of the deal.

The European Commission said today that Facebook told it at that time that it could not automatically match user accounts on its own platform and WhatsApp — yet the company subsequently revealed it would be doing just that.

The controversial change to WhatsApp’s privacy policy to share user data including phone numbers with Facebook took place in August last year — and led to widespread condemnation of the privacy U-turn.

In a statement today, the European Commission said: “The Commission has found that, contrary to Facebook’s statements in the 2014 merger review process, the technical possibility of automatically matching Facebook and WhatsApp users’ identities already existed in 2014, and that Facebook staff were aware of such a possibility.”

Facebook responded to the fine with its own statement — claiming it had made “errors” in 2014 when it made the filing to regulators.

“We’ve acted in good faith since our very first interactions with the Commission and we’ve sought to provide accurate information at every turn. The errors we made in our 2014 filings were not intentional and the Commission has confirmed that they did not impact the outcome of the merger review. Today’s announcement brings this matter to a close,” it said.

The EC is not reversing its decision to clear the WhatsApp acquisition. However it’s clear the region’s regulators are waking up to the cumulative power of big data holdings. And European data protection agencies’ fast-flowing objections to the WhatsApp-Facebook data-sharing quickly led to Facebook suspending these data flows in the region.

In a statement on today’s fine, EU Competition Commissioner Margrethe Vestager said: “Today’s decision sends a clear signal to companies that they must comply with all aspects of EU merger rules, including the obligation to provide correct information. And it imposes a proportionate and deterrent fine on Facebook,” she added.

The EC further notes that today’s decision is “unrelated to either ongoing national antitrust procedures or privacy, data protection or consumer protection issues, which may arise following the August 2016 update of WhatsApp terms of service and privacy policy”.

So while Facebook is claiming the specific matter is closed, it remains to be seen whether the company will face further regulatory problems related to its ownership and operation of WhatsApp.